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Advising on a complex management buy-out


TaxAssist Accountants was founded in 1995 to service the specific needs of small businesses.

By 2014, the network of franchisees had expanded to over 190 areas throughout the UK, with a further 25 in Ireland. In 2014, the TaxAssist executive management team asked Price Bailey for help with the buy-out of the group’s parent company, TaxAssist Direct Ltd.


During the negotiation process, many of the company’s franchisees, and other third-party branded trading partners and investors, offered investment funding. It was going to take a unique funding model to provide the founder’s desired exit terms while retaining the independence of the franchisor.

Creating this model presented a number of significant challenges:

  • The vendor had very firm expectations, which needed to be managed.
  • The firm’s management had slightly conflicting circumstances, due to historic incentivisation packages.
  • Numerous investors needed periodic updates, and enough information in the appropriate form to enable them to take advice before signing up to the deal.
  • There was no known existing model, so everything had to be done carefully and meticulously.

How our services have helped

As with many transactions involving complex funding negotiations, the buy-out went through a number of stages over a prolonged period before the final deal was reached. However, this process was vital in helping shape the eventual deal, with the investor group forming a franchisee-assisted management buy-out (FAMBO).

As part of the process, we carried out a detailed financial modelling exercise, examining the funding requirements and affordability of the anticipated deal structure. We also created a business plan for the new investors and bank to consider.

The agreed funding structure consisted of significant third-party investment from more than half of the franchisees and their staff, together with other trading partners of the company, plus a multi-million loan agreed with HSBC. External financial due diligence was undertaken on behalf of the bank, to examine the suitability of the proposals and financial model.

Following a round of meetings with potential investors and franchisees, we helped TaxAssist’s management devise a suitable corporate structure.

The FAMBO was successfully completed in August 2014. The business is now 32% owned by franchisees, 53% by the senior management team and 15% by long-standing external business partners.

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